Populist anger clearly evident,

But where’s effective action?

 

 By Roger Bybee

 

President Barack Obama is indeed trapped in a vise between the advice of his advisors and donors and the outrage of the people who voted for him, as William Greider   has articulated so well.

But an effective social movement to counter the Wall Street restoration will not emerge by itself. Several elements of the current picture stand out:
1) Unchanneled anger
Anti-corporate anger is seemingly everywhere, in lunch-counter conversations, newspaper columns and the Web, yet has barely emerged out into the streets. The takeover of Republic Doors and Windows in Chicago by UE members, when Bank of America refused to extend credit to their employer, was a heartening sign.

But apart from scattered anti-eviction efforts by ACORN, one gains little sense of grass-roots anger being translated into grass-roots activity. We need to seriously analyze the strange absence of spontaneous protest. In part, people may be refraining from taking action by the hope that Obama himself will cure the economic crisis.

But Obama is not only constrained by the circle of ex-Wall Streeters who advise him and who provide him with a narrow set of pro-corporate options, but also conservative Democrats in both the House (the "Blue Dogs") and Senate (eg., Max Baucus) who want to gut Obama’s surprisingly liberal budget plan.

Perhaps the best way to pressure Obama is to call for the firing of Lawrence Summers (who protected the AIG retention bonuses in the name of contracts’ sanctity; you’ll recall that Summers didn’t similarly defend the UAW’s contracts with GM and Chrysler) and to exert local heat on the sell-out Dems by unemployed, seniors, environmentalists, and union members picketing and staging sit-ins in their local offices.

2. Where’s our bailout? This refrain, voice millions of times by ordinary Americans, is not only a complaint about injustice but also a potential seed for a new social contract in America. If the economy cannot function without bailing out floundering banks brought down by their own greed, what is the government’s obligation to working families who worked hard for stagnating or falling wages, only to see their jobs going to China or Mexico, their homes up for foreclosure, and their pensions up in smoke?

Progressive need to take the "Where’s our bailout?" sentiment and help to shape it into something akin to the Economic Bill of Rights outlined by FDR and Martin Luther King. We need to firmly establish a new logic, a new "common sense" understanding that the US government must recognize the economic and social rights of all its citizens, not just those with seven mansions.

3. A practical program
While developing a full-blown alternative program must be the product of widespread democratic discussion, we need to start pointing a clear direction for Obama and Congress, and hold them accountable to it.
Among the components of this program:

a) An end to outsourcing . Corporations taking jobs out of the US at a time when they are desperately needed here must pay hefty taxes to cover the social costs of unemployment, the ecological costs of needless transoceanic shipping, and the exploitation of workers in high-repression, low-wage nations like Mexico and China.

But the NY Times reported March 7 that many corporations are taking advantage of the current crisis to shift more jobs overseas. This not negates much of the impact of OBama’s stimulus efforts, but will permanently transfer even more of our real economy outside the US:

"These jobs aren’t coming back," John E. Silvia, chief economist at Wachovia in Charlotte, N.C. told the Times. "A lot of production either isn’t going to happen at all, or it’s going to happen somewhere other than the United States. There are going to be fewer stores, fewer factories, and fewer financial services operations. Firms are making strategic decisions that they don’t want to be in their businesses"…

"For decades, the government has reacted to downturns by handing out temporary unemployment insurance checks, relying upon the resumption of economic growth to restore the jobs lost. This time, the government needs to place a greater emphasis on retraining workers for other careers, these economists say…. "

"The decimation of employment in legacy American brands such as General Motors is a trend that’s likely to continue," said Robert E. Hall, an economist at Stanford University‘s Hoover Institution. "

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b) An end to ‘too big to fail’
We can no longer allow Wall Street investment banks to use deregulatory steroids to grow to such massive proportions that they can effectively blackmail taxpayers into keeping them afloat–especially on their conditions (eg., bonuses, plush executive suites, and expensive corporate retreats).

T he point to any bailout–such as GM and Chrysler–must be to preserve and expand US employment, not simply maintain a familiar corporate logo. This means demanding that these corporations bring out-sourced jobs home; shut down subsidiaries in tax havens like Bermuda and the Cayman Islands; and develop programs for producing fuel-efficient cars and mass transit.

If the auto bailout means 22% unemployment in Detroit and 15% or so in towns like Janesville, Wis. where GM just shut down a plant, why are we giving billions to GM and Chrysler?

c. A single-payer health program covering all Americans . The presence of for-profit insurers hugely inflates the cost of healthcare (we pay double what any other advanced nation does), lowers the quality of care (The US ranks 37th overall in health outcomes) because insurers intervene to distort and limit treatments, and only add confusing and expensive red tape to the system.

 

d. Nationalization of failing banks During the late 1980’s savings and loans crisis, the US in effect nationalized S&L’s "after the savings and loans debacle of the Reagan years," notes NY Times columnist Paul Krugman. "That’w what wedeend did in the early 1990’s…And there’s no reason we can’t do the same thing now."

 

Except, as Krugman points out that Obama is once again being persuaded by Wall Streeters Timothy Geithner, the Treasury Secretary, "recycle Bush administration policy–specially ‘the cash for trash’ plan" originally proposed by hard-line free marketer Henry Paulson.  The problem with this approach of the goernvemrent guaranteeing private investments: "if assets go up, the investors profit, but if they go down, the investors can walk away from their their debt."

 

Nationalization is the only course for drilling down and determining the actual extent of "toxic loans" held by the banks. Getting this issue settled would do a great deal to moving the economy forward, which is now in a kind of suspended animation.

The current moment is one where our nation’s fate is poised on a knife’s edge. It could either roll back toward the re-consolidation of a society shaped by Wall Street financialization and the resulting deindustrialization and decay of countless communities, or we can move it toward a rebirth of American democracy and the extension of democratic principles into the economy to assure a voice and a decent life for all.

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